The big differences to take note of between BTC and gold
Disclaimer: This article is intended for US audiences.
Since the arrival of Bitcoin, many people have defined it as “digital gold” and the safe haven of the future. But does the comparison between Gold and Bitcoin really make sense? This is the question we wanted to answer by analyzing their similarities and differences.
A Language Borrowed From The Domain Of Gold
Since Satoshi Nakamoto published the Bitcoin white paper “Bitcoin: A Peer-to-peer Electronic Cash System” on October 31, 2008, and especially since it has become increasingly important in the financial landscape, investors have been using the language of gold to define Bitcoin.
The most used term is certainly that of safe haven. Considered a safe investment, Bitcoin would be for many people the solution to inflation, the economic woes of our system, and the depreciation of other currencies.
We must also point out that this is an evolution of this term since investors see in Bitcoin the ability to protect them from central banks and governments: they are the sole owners of their $BTC, which is equivalent to holding gold bars at home. No one else can access them.
Even though Bitcoin remains quite volatile at present, it is a long-term vision that pushes us to use the term “safe haven”.
While doing daily research on cryptocurrencies, we have also noticed other words that directly link gold to Bitcoin:
- The Bitcoin Standard: Referring to a potential new monetary system where the unit of account would correspond to Bitcoin (or Satoshi, the smallest unit of account).
- Digital Gold: Shedding light on the dematerialization of the Bitcoin currency and directly comparing its role to this precious metal.
- Gold 2.0: A term used to emphasize that Bitcoin is just a technological evolution of the gold we know.
- Internet Gold: An expression that shows that $BTC is very liquid and can be used across the internet.
The Big Differences Between BTC and Gold
As you can see, despite the comparisons made by many people, gold and Bitcoin currently display a lot of differences. Even if some of them may change over time, some differences are fundamental and entrenched.
Recognition by economic entities:
- Gold has been recognized by global entities for millennia and has been considered a safe haven and exchange value since time immemorial. The regulations are international and set by the IMF (International Monetary Fund) and other organizations. It is even held by central banks as a strategic reserve.
- For Bitcoin, it is more complex at the moment. Being much more recent, its recognition varies depending on the country. Some accept it and even start to make it a legal currency (like El Salvador), while others apply strict regulations or completely ban it. However, important developments are underway, such as the recent arrival of Bitcoin ETFs, accepted by the SEC (Securities and Exchange Commission) in the USA.
Exchange value:
- Historically, gold has always been a means of exchange for centuries. It is still possible to go to jewelers, or banks to buy and sell gold. But no one pays for their shopping in gold. Gold is traded mainly on all markets and in all forms: physical (ingot, coin), paper (ETF, bank certificate), mutual funds, futures and options.
- Bitcoin is just a newcomer as a currency, it has interesting features that may not only limit it to trading in the form of ETFs or via crypto exchanges. Being digital, many companies like Stripe integrate this currency and allow online trading. Some countries accept Bitcoin payments to buy commodities or even provide ATMs.
Utility:
- For gold, the utility is not limited to just a store of value. This precious metal can be used for jewelry, electronics, dentists, and a lot of other sectors of industry. Indeed, it is a heavy, highly conductive, and corrosion-resistant material, which will also be indispensable for our future technological advances.
- For Bitcoin, it is entirely digital and based on blockchain technology. This can also be used for a huge number of applications: traceability in industry, smart contracts, instant and international payment methods, and innovative applications. Its usefulness is not actually as tangible as that of gold, but will still impact many sectors.
A New Angle in the Gold vs. Bitcoin Debate
In the context of comparing Gold to Bitcoin, Crypto All-Stars memecoin offers a unique perspective on the evolving landscape of digital assets. While Bitcoin is often referred to as “digital gold,” serving as a store of value and a potential safe haven, Crypto All-Stars introduces a new dimension by blending the world of cryptocurrencies with the cultural phenomenon of memes.
Crypto All-Stars’ innovation lies in its MemeVault staking protocol, which allows users to earn $STARS tokens by vaulting popular meme coins. This mechanism represents a shift in how we perceive value in the digital age, much like Bitcoin’s decentralized nature disrupted traditional finance.
While Bitcoin and gold are compared for their roles as stable assets, Crypto All-Stars embodies the dynamic and speculative side of crypto, attracting a community that values both entertainment and financial innovation.
Can BTC Compete With Gold?
Basically, Bitcoin may actually have an important role to play in our economic system, just like gold. Being decentralized and available digitally, it seems even more practical to hold Bitcoin than gold bullion as a store of value AND as a currency.
However, future global laws and regulations around Bitcoin will directly impact its future and its ability to compete with gold. With the recent arrival of Bitcoin ETFs in the US thanks to the acceptance of the SEC, everything seems to be accelerating: London, Hong Kong, and other countries are integrating $BTC into traditional finance.
ADVT.
This article is brought to you by Clickout Media
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